According to section 44 of the Act, compensation for loss of income (also known as CLI) is paid to workers who suffer from a work-related accident, an occupational disease, a relapse, or a worsening injury which prevents them from carrying out their duties.
Amounts paid as compensation will vary according to the worker’s professional status (full-time, part-time, or seasonal). Workers who are attending school, self-employed, temporarily out of work, or receiving employment insurance benefits are all subject to specific calculations.
The legal principle to keep in mind is rather simple: the injured individual must benefit from working conditions that are as similar as possible to the ones they were used to before the work-related accident occurred. Whenever the worker was granted financial advantages such as tips, commissions, bonuses, or overtime, such advantages (provided they are duly proven and quantified) should be taken into consideration in the calculation of their income replacement benefits. An increase of the amount of benefits is specifically provided for in section 67.
As a rule, benefits are calculated according to a worker’s regular income and domestic situation. In fact, the Act explains how the individual’s net income must be calculated once their gross income has been established. It must be pointed out, however, that net « income » differs from net « salary ». When it comes to family obligations, the Act takes into account the income tax the worker must pay at the federal and provincial levels. Whenever one’s domestic situation changes between the initial injuries and the moment at which worsening or a relapse occurs, the relevant adjustment must be considered.
In a nutshell, the legal framework provides that the calculation of benefits must reflect as closely as possible the financial and domestic situation the worker was in at the time the work-related accident or occupational disease occurred, so they receive most of the income they would have earned had it not been for such accident or disease.
The benefits collected under the Act are tax-free and unassignable. Except when it comes to compensation for loss of income (which can be seized up to 50% in order to address unpaid alimony), they are also unseizable.
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(Nothing in the foregoing must be interpreted or construed as providing a legal opinion.)
